Stage 1: Super newbie

This is the first stage of your trading career and you are full of hope. You study everything you can do like RSI, MACD, Fibonacci ...

You make a few trades and even have a few winners in a row. This continues until you lose money. But that loss is not a normal loss because it wiped out your entire trading account.

Now, that's when you realize trading isn't all about trading strategy, indicators, patterns ... because there's something called risk management. That's when you move on to stage 2 ...


Stage 2: Risk specialist

At this stage, you understand the importance of risk management and how it plays a huge part in your trading. Slowly, your huge losses disappear into oblivion except by the time you break your rules.

But you are not done yet. Your losses have been curbed but it seems that the winners have not made up enough for your losses and if this goes on forever, you will end up dead by thousands of cuts.

This is when you realize that risk management is not enough for you to be a stable profitable trader. You move on to stage 3.

Stage 3: The lone ranger

That is when you think that risk management, discipline, and psychology are not enough if you want to become a trader with steady returns.

Because your trading strategy must have an edge in the market, without it, even the best trading psychology or risk management won't save you.

Once you have an edge in the market, combined with proper risk management, that's when you move on to the next stage.

Stage 4: Business owner

You have to improve your trading psychology. Now, the mentality required to trade a $ 10,000 account differs greatly from a $ 1 million account. If you risk 1% per trade, it's about $ 100 on a $ 10k account. What about a million-dollar account? That's a risk of $ 10,000 per trading.